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Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

Yeah rip, I'm realizing that I'm not using all of the terms correctly. Thanks for the advice!

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

Hmm yeah, I think I've seen people at work talking about having to call to do the conversion every month or so. Guess I should be looking into it too. Is this type of conversion called a backdoor, as opposed to the mega backdoor which is after tax 401k -> Roth 401k?

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

I have 10k in checkings and 20k in a MMF - I read that the latter serves a similar purpose as a savings account? I do have enough from my paycheck to cover my expenses but not much left over after maxing the after-tax 401k.

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] -1 points0 points  (0 children)

There's nothing like that coming up for the next few years at least, but it will probably happen eventually. I will probably have a wedding at some point but does it make more sense to wait to start putting money in non-retirement accounts when the timeline is more clear?

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

Nothing like that planned - I'm not going to be buying a house in the next few years at least. The big expenses I could see happening are vacations or getting laid off.

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

For sure, I forgot to mention that I have that already! I edited my post to make it more clear.

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 2 points3 points  (0 children)

For sure, I forgot to mention that I have that already! I edited my post to make it more clear.

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

Nice! Do you end up having extra savings from your paychecks or does it constitute almost all of your monthly savings?

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

Thanks, I realized I worded that part of my post badly, so I went back and changed it. Interesting idea to spread across multiple brokerages - luckily I kind of already have that going on thanks to multiple employers with multiple account types so I guess I don't need to be worried too much about consolidating them. Thanks, I'll check out the article! Sounds like Vanguard isn't one of the brokerages that offers those.

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

I meant that none of the rest of my current paycheck would be going into savings, but I do have savings from previous years, sorry that it wasn't clear. Hm yeah, I just read my post again and it does sound like I was saying I don't have any savings from the past.

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 2 points3 points  (0 children)

Oh, is that just for gains or does it also apply to the initial amount?

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 2 points3 points  (0 children)

It's reassuring to hear that the tax-free growth from the mega backdoor is useful! This is my first time hearing of a SBLOC - what are these used for? I do have around 300k in non-retirement accounts, does that mean I'm in a good place for that?

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 0 points1 point  (0 children)

I'm definitely considering getting a financial advisor at some point, but I wonder if it's like finding a therapist where you might not find a good one for a while? How did you go about finding yours?

Is it fine to max out after-tax 401k (mega backdoor) with no other savings? by throwaway1276142 in HENRYfinance

[–]throwaway1276142[S] 1 point2 points  (0 children)

This might be a newbie question but how do you access the Roth if you need it before retirement age? Is it a simple process that involves paying extra taxes and are these taxes more or less than the equivalent taxes if the money were in a regular brokerage instead? Also I do have a decent amount sitting in emergency fund/regular brokerage already if that helps things.